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Good morning.
I'm Nathan Hager and I'm Karen Moscow. Here are the stories we're following today, Karen.
The bounce back in the markets this morning follows another selloff on Wall Street on Monday. All three major indexes fell at least two point four percent. President Trump's demands on FED Chair J Powell to act on rates are renewing concern about the President meddling with central bank policy. Claudia Sam, a former Federal Reserve economist, says it is a real concern.
I take it very seriously, and I, you know, this administration has taken steps, whether it's with the tariffs or with downsize in the government, that really were, you know, beyond expectations. So I, you know, the unthinkable is thinkable with this administration.
Claudia Sam is currently chief economist at New Century Advisors, and concerns about Fed independents also have Gold on the rise again this morning. Earlier top thirty twenty five hundred dollars an ounce for the first time. Right now it's at thirty four to sixty seventy cents.
Well, Nathan, the S and P five hundred is down by nine percent since Trump unveiled sweeping tariffs earlier this month on most US trading partners. The chief economist of Apollo Global Management, Touristen Slock, says a recession is the most likely scenario if the current tariffs take place.
Maybe we'll take a few more weeks, maybe the worst case a few a month or two, but we will eventually begin to see the net effect if these tariffs stay in place. And that's why we think there's a ninety percent chance of a recession if these tariffs stay at these current levels.
And Apollo Global Management's tourst end slocks as foreigners own nineteen trillion dollars of US equities, seven trillion of treasuries, and five trillion dollars of US corporate bonds, accounting for about twenty to thirty percent of the total market. He says the unwinding of those holdings could cause substantial pain.
And Karen Bloomberg Economics estimates President Trump's tariffs would shave about two trillion dollars off global output by the end of twenty twenty seven. Get that part of the story from bloomberg 'zamy Morris in Washington.
Analysts find that the president so called Liberation Day tariffs will mean a historic shock to the world GDP Bloomberg Economics analysts find that for the US, Trump's tariffs act like a massive tax hike and is considered a major shock.
They say one casualty could be FED independents. Whether President Trump attempts to fire FED chair J. Powell or waits until the end of his term, it now does look likely that the next FED chief will be picked, at least in part, based on alignment with Trump's policy preferences. In Washington, Amy Morris, Bloomberg Radio.
All right, Amy, thank you. President Trump met with major retailers at the White House as executive sod really from tariffs that have destabilized global supply chains and rattled US consumers. Jordan Fabian Is Bloomberg News White House Editor.
That china one hundred and forty five percent tariff looms large over this conversation and used to do work across purposes when you have these companies coming in asking for a relief and you have not to mention these Southeast Asian countries who have higher rates as well, you know, questions about transhipment, etc. These are a lot of issues to untangle, and so it's unclear where this is going to end up as a result of this.
Meeting, Bloomberg.
Jordan Fabian says the meeting included representatives from Walmart, Home Deepot Lows, and Target, and.
The tariffs are already starting to hit some firms in Japan Karen. A survey of more than five hundred companies by Japan's Ministry of Finance shows about ten percent of them say the measures have affected their businesses. The CEO of Japanese beverage giant Sentory Holding, says tariffs could make companies reluctant to invest in the US.
Current tariff situation is losing the appetite from other countries to the United States. So this is really killing the opetite from the world to the United States. So we are losing the opetite to invest in the United States.
Sentaory Holding CEO Takashee Nanami Warren's US tariffs could reduce Japan's GDP by as much as one point two percent.
Well Nathan.
One of the hardest hit stocks during the recent market selloff has been Tesla. In this afternoon, the ev giant will report its first quarter earnings, so we can a preview with Bloomberg's Tom Busby.
It's been a tough start to the new year for Tesla. Shares have lost about forty five percent of their value so far in twenty twenty five, and it posted weaker than forecast Q one sales earlier this month. The reasons an aging lineup, few details about more affordable evs to come, and a lot of backlash against CEO Elon Musk for ties to President Trump's cost cutting DOGE task Force, and
support for far right politicians in Germany. Consensus calls for a justin ernigs per share of forty four cents total revenue of twenty one point four to three billion.
Tom Busby, Bloomberg Radio, All right, Tom, thank you, and other news. This morning, President Trump is standing behind Defense Secretary Pete Hegseth as he faces a new report that he shared Yemen attack plans on a second unsecured signal chat that included his wife and brother. The President was asked if he still has confidence in Hegseth at the White House Easter egg Roll.
Why do you even ask a question, Dad?
We have regroupments that said a all time high, the spirit and the amed courses is fantastic.
No great confidence.
The president spoke after a former Pentagon spokesman, John Elliott said the Defense departments and a full blown meltdown in his works it could cost hag Seth his job. That criticism came after three top Defense Department officials said they were fired in the middle of a leak investigation but
weren't told what they were being investigated for. President Trump is blaming disgrunted employees for the pressure on heg Seth says he's doing a great job, but Republican Congressman Don Bacon, who sits on the House Armed Services Committee, says if the reports about heg Seth are true, he won't tolerate it well.
Nathan Harvard University's high stakes showdown with the Trump administration has ratcheted up another notch, and Bloomberg's John Tucker joins us with Mora and John. It looks like this battles headed to court.
Karen Harvard is suing several US agencies as well as top officials, for freezing billions of dollars in federal funding, much of it critical medical research funding. Lawyers for the university argued in a lawsuit filged yesterday in federal court that the government unlawfully suspended Harvard's funding after it refused to comply with unconstitutional demands to overhaul governance, discipline, hiring,
and diversity programs. O' donald Trump escalated his fight with Harvard after the school refused to bound to his administration's demands. Since threatening its funding, Trump suggested the IRS should also tax the university as a political entity. Without the funding, this toolsked in the complaint, it will be forced to either reduce or halt ongoing research projects and terminate employment contracts with researchersw York. I'm John Tucker, Bloomberg Radio.
It is time now for look at some of the other stories making news in New York and around the world, and for that we're joined by Bloomberg's Michael Barr. Michael, good morning, Good.
Morning, Karen. Cardinals a meeting at the Vatican to make the first decisions about running the Catholic Church following Monday's death of Pope Francis. They need to decide when the conclave will begin to elect his successor. Today's Congregation of Cardinals could choose to begin the public viewing as soon as Wednesday. The funeral is Saturday. Tributes continue to pour in for Francis.
President Trump he was a good man, worked hard, he loved the world, and it's an honor to do that.
Former Speaker of the House Nancy Belosi called the Pope's passing personally devastating.
All of us who are singing the praises of his ownness will pray to him and also also follow his legacy.
Chicago Cardinal Blaze Competch.
Even though it was clear that he was not feeling well, he wanted to be with people, and I think that he had the attention of making sure that people realize that he was with them.
The Vatican says the pope died from a cerebral stroke, which caused him to fall into a coma and then essentially heart failure. The Trump administration says starting May fifth, federal student loans in default will be referred to debt collection. Aisa Conchola Banyez is the policy director for the Student Borrower Protection Center. She says there are about five million Americans who are currently in default.
Folks who are behind are already seeing major hits to their credit score and seeing these negative marks on their credit reports.
After a thirty day notice. The Department of Education will also begin garnishing wages for borrowers in default. Finally, the Trump administration is threatening to stop federal approvals for transportation products in Manhattan and May, with holding funding if New York City's congestion pricing program continues. The US Transportation Secretary has given in the Metropolitan Transportation Authority and ultimatum to end the congestion pricing by May twenty first or face
the consequences. New York Governor Kathy Hokol and the MTA are refusing to back down, with the MTA seeking a court decision to declare the administration's move to end the fee as null and void. Global News twenty four hours a day and whenever you want it with Bloomberg News Now. I'm Michael barn This is Bloomberg Karen.
Right, Michael Barrn, Thank you time now for the Bloomberry Spores update. Here's John stash Hour. John, Good morning in Nornie, Karen.
The Knicks We're able to come from behind in the fourth quarter and win Game one from Detroit at the Garden. Forty eight hours later, they almost did it again, trailed by thirteen, but was just over a minute ago.
It was only two.
What Rutson handles it. It's a two point game, Brookson one on one with Schroder, Brunton Tribe fish Horts open time, the last New York League sixteens fifteen to the.
First, Shrewder Shupper come home.
It's a three.
Ice water in his fame non tnt so. Detroit went back ahead. Mcal Bridges later had a wide open look at a game tyme three pointer he missed, and Detroit won its first playoff games since two thousand and eight, one hundreds of ninety four, Cade Cunningham thirty three points, Jalen Bruns Levenecks with thirty seven. Game three is Thursday in Detroit. Clippers won in Denver one O five one oh two. Who Islanders scored thirty nine. That series also
tied at one, while the road teams won. In the NBA, the home teams went four to ozho on the ice. Two games went overtime. Dallas beat Colorado four to three, and Washington beat Montreal three to two on an Alex Ovechkin game winner. Winnipeg top Saint Louis two to one, and a wild one in LA the Kings led Edmonton for nothing five three was just over two minutes left.
The Oilers tied it up and then La scored with forty eight seconds to go to win six to five for the Messa City Field, where they're now ten and one more great Pitchinal of the Phillies scored four times on the ninth dinning, the Mets held on it went five to four. Francisco Lindoor a lead off home run later a three run shot home runs did in the Yankees. In Cleveland, Jose Ramirez went back to back with Kyle Manzarto third in off. Clerk Smith Guardians beat the Yanks
six to four. John Stashammer, Bloomberg Sports Kunda, Nathan.
Coast to Coast on Bloomberg Radio, nationwide on Sirius XM, and around the world on Bloomberg dot Com and the Bloomberg Business app. This is Bloomberg Daybreak.
Good morning, I'm Nathan Hager. Markets maybe due four bounce back from the steep declines to start the week, but the pressure remains on FED Chair Jerome Powell since President Trump had this to say in the Oval office last week.
I don't think he's doing the job he's too late, always too late, blue slow, and I'm not happy with him. I let him know it, and if I want him out, he'll be out of their real fast believe me.
Man the president and follow that up this week with a social media post saying there could be a slowing of the economy if Powell doesn't cut interest rates now. So let's get more and what's happening in this market. We are joined by Daniel Morris, Chief Market Strategistic BNP Paribough Asset Management. Daniel, it's great to speak with you. How seriously should the market take this pressure on Chairman Powell as the President Trump continues pressure around trade? Good morning, Good morning.
Well, certainly it's a quite serious topic, something that most investors would probably be happier with the status quo than the change of that magnitude. So I think it's something absolutely have to pay attention to anticipate what the consequences might be. And I think if you look at what's been happening with the dollar in general over the last couple of weeks, you know this could be another factor. If it escalates, that would potentially weaken the dollar.
Well, what could the confidence or the consequences be Daniel, if we did see a serious threat to federal reserve independence.
Well, I think what ultimately, in an abstract version of it, the reason the argument that you want to have independent central banks is that you don't want the central governas to the central goverment, the federal government of any country, using monetary policy to promote their own normally a growth agenda, because a concern is going to be over the medium term,
you're going to end up with higher inflation. So it really does come down to that anchoring of inflation expectations which is so important to central bankers, and that would be I think the primary risk that investors would see. Would investor would inflation expectations become unanchored if you had a central bank that was fewed as less independent.
Well, how would the market take it if the Federal Reserve were to cut interest rates?
Well, it's not necessarily a clear cut whether they should or they shouldn't. When you're in arguably or approaching a stagflationary environment, meaning that in the short term at least
prices are going to go up. So by the definition of a change in prices, it's inflationary, even if it's not inflationary really in the sense gentral Banks think about insofar it's not necessarily to be a permanent increase in the rate of price changes, but an increase in prices that's likely to lead to a slow down of growth,
at least in the short term. And then given that the FED has a dual mandate essentially focusing on growth the unemployment rate, but also inflation, you can argue both ways they should potentially be cutting rates to offset the negative impact on growth or raising rates to offset the impact on inflation. But if the inflation iffact is temporary, you would probably fall back to growth, So them cutting
in this environment isn't necessarily an outlandish idea. We're seeing that happening in the Eurostone the US to be discut rates exactly for that reason.
And we've seen some pretty dramatic estimates of the economic impact if President Trump's tariffs were to remain in place beyond the ninety day pause, ninety percent risk of recession from a Torston Slocket, Apollo Global and Bloomberg Economics estimating trillion dollars in global GDP could be shaved off by the end of twenty twenty seven. Do those estimates make sense.
Well, I think we should perhaps recall how bad our forecasting was during the pandemic, and so it's not to criticize economic forecasting, but at the best of times, it's not particularly accurate. And when you're in an environment that is unprecedented, like it was during lockdowns, your models really
aren't of much use at all. So I think we certainly can attempt to forecast what would happen with GDP growth in the event and terrorists came back and stayed in place, But I think we'd have to acknowledge that there's going to be a huge confidence interval around those estimates, simply because there's really been no preceding episode like this to tell us, Okay, that's happened, then this because is going to happen this time.
This is Bloombergy Daybreak, your morning podcast on the stories making news from Wall Street to Washington and beyond.
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And I'm Nathan Hager. Join us again tomorrow morning for all the news you need to start your day right here on Bloomberg Day Ray